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FCC, Congress Gear Up for Net Neutrality Next Steps

After months of speculation about how the Federal Communications Commission would act on its new open Internet rule, the agency is beginning to show its cards, and lawmakers watching the net neutrality issue are starting to put plans of their own into play in reaction.

Although the FCC hasn’t provided any specifics to the public yet — it’s due to circulate its proposal internally Feb. 5 and its members are set to vote on the final rule Feb. 26 — its chairman last week indicated the regulatory scheme will lean on authority that net-neutrality advocates, including President Barack Obama, have been clamoring for it to use.

But while those battle lines are well established, a new option has also emerged: Members of the Senate Commerce Committee are in the initial stages of negotiating a bill that would address Internet regulation, though what that might look like is an open question that won’t be answered until after the FCC debuts its proposal.

The central issue in the net-neutrality debate is whether the FCC will shift the authority through which it regulates Internet service providers from Section 706 of the Telecommunications Act (PL 104-104) to Title II of the 1934 Communications Act.

The latter authority is the one the agency uses to regulate telephone companies and other common carriers. The FCC used Section 706 to build a 2010 open Internet rule that forbade ISPs from throttling content providers’ and consumers’ traffic, and from entering into pay-for-service deals offering content providers priority access to networks. Three years later, a federal court overturned the rule, saying the FCC can regulate under Section 706, but must allow for some throttling and paid prioritization, as long as it meets a “commercially reasonable” standard.

That was the starting point the FCC used to construct its new rule, Chairman Tom Wheeler said during last week’s CES International Conference in Las Vegas: Use Section 706 and a commercially reasonable standard, but try to enshrine the principles from the overturned rule. But over time, he said, the commission found that was too confining.

“It became obvious that ‘commercially reasonable’ could be interpreted as what is reasonable for the ISPs — not what is reasonable for the consumers or the innovators,” he said.

Wheeler was careful to note he wasn’t going to get into details about what the new regulatory proposal will look like.

Still, the chairman indicated that Title II will be a serious factor in whatever the FCC releases. While drafting its rule, the FCC decided that rather than staying with commercially reasonable, a better standard would be “just and reasonable” — a Title II concept.

“It has the best protections,” Wheeler said.

Those deliberations have hardly been confined to closed doors. The FCC has for months been answering questions about its rule-making and holding public discussions among lawyers, academics and technology experts about the benefits and drawbacks of different approaches. The technical issues filtered into the mainstream to such an extent that players in the net-neutrality movement began trying to pressure the FCC to make a Title II switch. Title II received a significant bump in its public profile in November, when Obama sent the FCC a letter urging it to use the authority. Wheeler said concerns about the letter were overblown.

Congress has also been closely watching the FCC’s work and Wheeler’s talk about Title II drew encouragement from Democrats.

Republicans have long opposed a change to Title II, and last year began threatening legislation that would restrict the FCC’s authority. After Obama sent his letter, more than three dozen senior House and Senate members sent the commission a letter saying that the use of Title II would exceed the FCC’s legal authority, and result in it regulating the Internet “like a 20th-century monopoly.”

In more recent weeks, however, some members have struck a more conciliatory — though no less adamant — tone.

“The endgame should not be heavy- handed regulation that will lead to a bonanza of litigation and uncertainty,” said Oregon’s Greg Walden, head of the House Energy and Commerce Subcommittee on Communications and Technology. “Instead, we would encourage the chairman to join Congress in working to enact a shared set of principles that will withstand legal challenge. We can achieve a bipartisan solution to provide consumers the protections they deserve, the choices they want, and give job creators legal certainty ensuring continued investment in the Internet.”

While the FCC proceeds with its rule-making, the new heads of Senate Commerce, Science and Transportation are entering into their own negotiations. Chairman John Thune of South Dakota and ranking Democrat Bill Nelson of Florida have arranged staff meetings intended to develop a proposal independent of whatever the FCC releases.

Don’t expect a legislative proposal anytime soon, however — the senators are still at the point where they’re trying to come up with a list of principles upon which they agree, and are far from the point where they would be hashing out specifics on language.

The FCC certainly sounds like it’s already done work to respond to any charges from members who oppose the use of Title II. One of the most pointed criticisms about a regulatory switch is that it could deter Internet service providers from expanding their networks at a time when there’s a national interest in incentivizing those companies to build more and better infrastructure.

But FCC officials note this isn’t the first time a growing technology and communications sector has come under Title II regulation. Two decades ago, the agency decided to use that authority for wireless service, despite some push back from the industry. Wheeler, who was on the other side of the table for those negotiations, representing wireless carriers during discussions with the FCC, said the regulation didn’t stop the system from expanding, or the industry from profiting.

“For the last 20 years, the wireless industry has been monumentally successful,” Wheeler said.

When the FCC brought wireless under Title II, the agency went through a process known as forbearance, essentially saying that there were certain parts of the statutory authority that the industry would not have to abide. Wheeler said the commission could do the same for Internet service, ruling that parts of Title II would be inappropriate.

“There is a way to do Title II right,” he said.

Correction, 3:05 p.m.

A previous version of this story incorrectly stated what type of vote would take place on Feb. 26. The vote will be on the final rule.

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